Early dismissal under Rule 29 of the SIAC Rules: when is it a breach of natural justice for an arbitral tribunal to dismiss a party’s case without a full evidentiary hearing?
Insights
In DBO and others v DBP and others [2024] SGCA(I) 4, the Court of Appeal held that there was no breach of natural justice or excess of jurisdiction in an arbitral tribunal’s decision to grant early dismissal of a party’s case pursuant to Rule 29 of the SIAC Rules.
Case Note
The appellants sought to set aside an arbitral award in which the tribunal had granted early dismissal of their claim and/or defence that a US$200m loan agreement had been discharged by frustration due to the COVID-19 pandemic.
The tribunal’s award was made under Rule 29 of the SIAC Rules, which empowers a tribunal to dismiss a party’s case without the need for a full evidentiary hearing on the basis that it is “manifestly without legal merit”.
The appellants alleged that the tribunal and the respondents had agreed to proceed with the Early Dismissal Application on the basis that there was a collateral contract between the parties that the loan and interest would only be repayable from certain specified sources – namely, the development of a project (the “Project”) and rental income from a mall (the “Mall”). The appellants claimed that the tribunal was therefore bound to find that, if the proceedings went to a full hearing, there would be a factual dispute as to whether there was such a collateral contract between the parties. Given this factual dispute, the tribunal could not have properly granted early dismissal of the appellants’ case.
The appellants’ arguments were rejected before the Singapore International Commercial Court. The Court of Appeal upheld this decision, finding that the tribunal and the respondents had not agreed to proceed with the Early Dismissal Application on the basis that there was a collateral contract as asserted by the appellants. While the tribunal and respondents had agreed to proceed on the basis that there was a collateral contract that the funds from the Project and the Mall would be used to repay the loan and the interest, the respondents had made clear that they understood that the collateral contract did not have the effect of limiting the source of repayment of the Loan to only the proceeds of the Project and the rents from the Mall.
Setia Law LLC successfully represented the respondents with our team comprising Danny Ong, Bethel Chan, and Mazie Tan.
🔗 Read the full judgment here: https://www.elitigation.sg/gd/s/2024_SGCAI_4
🔗 Link to the SICC(HC) judgment here: https://www.elitigation.sg/gd/sic/2023_SGHCI_21
